So how would a non-fiat currency work today?

[wvojak]

I like PMs. I own PMs. I agree with most of the things that have been said about fiat money.

BUT!!!!

How would a non-fiat economic system work in today's world?

One problem I see is that there just isn't enough Gold/Silver on the planet to provide everyone with enough PMs to sustain an economy.

Given that there are ~6.7 Billion people on the planet.

And using "above ground" estimated numbers from www.silverbearcafe.com, we have
5 Billion ozt of gold = 0.75 ozt per person
1 Billion ozt of gold = 0.15 ozt per person

Even if coins were minted at 20% content, opposed to the older 90% coins, that would still only increase the money supply X5.

If we went back to a Gold/Silver Standard, it would have to be fractional in nature. So even at a 20:1 fraction reserve, there still would not be enough money.

I realize that everyone here slams inflation, but yet no one complains when they buy a house for $150K, and sell it 20 years later at $300K. Is limited inflation good/useful?

I agree that fiat money opens up a can of worms, as we have seen over the past several decades. But is fiat a necessary evil? Could fiat work if there were appropriate controls in place such as a Constitutional Amendment requiring that ALL Federal and State expenditures must be "On The Books" AND that the State and Federal Government MUST have a balanced budget.

Some might say, but a balanced budget amendment restricts the government during times of emergencies like WWI and 9-11 aftermath. Don't know the answer. . Even War Bonds create Federal debt. .

Anyway, I'd like to hear how you would see a non-fiat economic system working.

Thanks!

[palani]

Things you want to own you pay for with substance (land might be an example).

Things you would rather government own you pay for with fiat (car, food, clothes, computers).

[Book]

http://www.newlaunches.com/entry_images/0109/22/Chrome_Mercedes_C63_AMG-thumb-450x337.jpg

Gold remains in the hands of the evil few at the top. They trade it between themselves by the TON.

All future currency will be digital.

:oo-->

[madfranks]

How would a non-fiat currency work today? Well first off, if we had one, it would put an immediate stop to the gigantic trade gap (http://www.moneycontrol.com/news/world-news/us-trade-gap-widens-sharplyjune_477439.html) in the US as we import more and more and export less and less. If we had a limited amount of non-fiat money (lets say gold coin), we couldn't keep buying crap from overseas, we'd run out of money and need to produce more exports to get the money back. Our economy is so out of balance and a real commodity-based money would fix that right away.

Regarding the "there isn't enough gold to service a modern economy" thought, I think there is. You can make certificates and/or token coins as required worth a gram, a tenth of a gram, a hundredth of a gram of gold, ad infinitum. As long as they're managed in a free market manner with unconditional redemption on demand, the market would take care of the rest. And you might say it would be really difficult to redeem a 1/100th gram gold certificate, but remember Liberty Dollar, in their silver certificates it stated that you could only redeem them in quantities of full ounces at a time. The gold certificates might work similar, where redemption requires minimums, or if someone devised a method of producing thin gold wires embedded in plastic containing 1/100th gram or whatever. Like I said, the market would meet the demands of the people if we had a free market gold based money.

[Bluegill]

Anyway, I'd like to hear how you would see a non-fiat economic system working.

Thanks!


Just like it did before we went to a fiat currency...

Get yourself a copy of G. Edward Griffin's The Creature from Jekyll Island. He does a rather good job of answering your question in chapter 7. You will realize that the thought is nothing but Keynesian propaganda.

[Book]

Regarding the "there isn't enough gold to service a modern economy" thought, I think there is. You can make certificates and/or token coins as required worth a gram, a tenth of a gram, a hundredth of a gram of gold, ad infinitum. As long as they're managed in a free market manner with unconditional redemption on demand, the market would take care of the rest.



Who can we trust to "make certificates" and manage this "free market" ?

:oo-->

[JohnQPublic]

I like PMs. I own PMs. I agree with most of the things that have been said about fiat money.

BUT!!!!

How would a non-fiat economic system work in today's world?

One problem I see is that there just isn't enough Gold/Silver on the planet to provide everyone with enough PMs to sustain an economy.

Given that there are ~6.7 Billion people on the planet.

And using "above ground" estimated numbers from www.silverbearcafe.com, we have
5 Billion ozt of gold = 0.75 ozt per person
1 Billion ozt of gold = 0.15 ozt per person

Even if coins were minted at 20% content, opposed to the older 90% coins, that would still only increase the money supply X5.

If we went back to a Gold/Silver Standard, it would have to be fractional in nature. So even at a 20:1 fraction reserve, there still would not be enough money.

I realize that everyone here slams inflation, but yet no one complains when they buy a house for $150K, and sell it 20 years later at $300K. Is limited inflation good/useful?

I agree that fiat money opens up a can of worms, as we have seen over the past several decades. But is fiat a necessary evil? Could fiat work if there were appropriate controls in place such as a Constitutional Amendment requiring that ALL Federal and State expenditures must be "On The Books" AND that the State and Federal Government MUST have a balanced budget.

Some might say, but a balanced budget amendment restricts the government during times of emergencies like WWI and 9-11 aftermath. Don't know the answer. . Even War Bonds create Federal debt. .

Anyway, I'd like to hear how you would see a non-fiat economic system working.

Thanks!



The per capita production of gold and silver is actually a little higher today than it was over 100 yrears ago, so I am not sure you can argue there is not enough metal out there. If it becomes monetary, the supply will be used monetarily. see this article:

What Do Silver and Gold Buy? (http://www.gold-silver.us/what_silver_gold_buys.html)

[Glass]

The problem with FIAT believers is that they believe more is better when in fact it's the opposite. The big thing with a non FIAT currency would be that the Trillionaires and Billionaires and many Millionaires huge piles of "numbered money" would disappear over night.

Why is that?

If my house was bought for $500,000 FIATs and in 7 years it doubles to $1,000,000 FIATs then has my house increased in value? I have more FIATs so it must have right?

No the buying power of the FIATs decreased by 50% in 7 years and I now need 2 times as many FIATs to buy the house.

ATM a $20 gold coin has $1200 FIATS of value (which is an artificially low exchange rate). So if I was to buy in gold coin I would need only $8333.00 in gold coin to buy that house. (using FIAT exchange rates) The problem there is that the house is worth 1/2 a million FIATs when I bought it and 1 million in 7 years, but in gold coin I would not be a millionaire at all. In 7 years time the house would still be worth the same gold... possibly less for the house and maybe more for the land. But that is a depreciation of house vs availability of land issue not a money value issue.

With gold I would be better off financially but not egotistically. I always smile when I meet a millionaire. A million of what? Debts basically. A millionaire is more indebt than poor person. A millionaire is "living the dream" IMO. A poor person could be more wealthy than a millionaire if the meagre assets they have are the right ones.

As for there not being enough. There would be enough but each piece would be valued differently to FIAT. This is always the problem, you can't compare FIAT with Gold using FIAT valuation mindsets.

An ounce of gold is worth an ounce of gold. It is not worth any FIAT at all. You are lucky people will take you FIAT and give you gold. Do it while they are still stupid and do it often.

Billions or probably trillions of FIATs are spent every year digging up gold and silver? Why.

Why do Governments only pay debts using gold. Note Govts don't actually pay debts now, they just roll them over or settle them, which is different to paying them.... but their rules say Gold and Silver in payment of debt. The US does, Australia does, Canada does.

It is a hard nut to crack and I was asked this same question by a family member and I really struggled to get the point across. It was tough. All I could say was, it has been money for thousands of years but fundamentally I felt all I was putting across was that it came down to faith in something tangible compared to something that wasn't real.

Value comes from the human energy put into it. We are basically the power source for the whole system. FIAT takes no effort to create and an artificially manipulated level of energy to obtain. By this I mean taxes and levys to deplete your supply so you need to expend more energy to get more FIATs.

There is an old B/w movie clip going around on youtube or somewhere of miners talking... perhaps someone could post it please. I think it explains why, but basically it is the energy input to get the gold. Blood, sweat and tears.

Maybe it should be Blood Sweat OR Tears. Fiat being tears cause that's how it always ends

[Glass]

Non FIAT currency working today. It's a begining anyway... oh oh. But look WHO is doing it. Oh dear.

http://www.youtube.com/watch?v=Wkb_ykilflU